Nebius Borrowed $3.5B for a Year Despite $40B in Contracts
Here's a riddle for you: a company sits on more than $40 billion in long-term contracts with investment-grade customers — including Microsoft and Meta — and yet, on Thursday, it walked into Citi and asked for a one-year loan. Not a small one. $3.5 billion.
That company is Nebius, the Amsterdam-based AI cloud firm racing to build data centres and buy GPUs fast enough to keep up with the AI boom. And the loan — maturing in 364 days, one day short of a year, because banking has its rituals — is the clearest signal yet of what the neocloud business model has become: a financing treadmill running at full sprint.
Reuters' Toby Sterling reported the news from Amsterdam on Thursday. The facility, Nebius said, will fund continued development of its data centres and GPU purchases, with an initial interest rate of 2.75% over the term SOFR benchmark. The company framed it as buying itself breathing room — more flexibility, in corporate parlance, over the timing and structure of further fundraising into 2027 and beyond. Other funding, it said, keeps flowing from customer prepayments and operating cash flow.
COO Ophir Nave was the one put in front of the statement. "This facility provides additional financing to support our near-term capacity build-out," he said, and pointed to the rest of the toolkit: borrowing against that $40-billion-plus contract book if needed.
The deal, in plain terms
Strip away the press-release gloss and here's what just happened: one of the world's biggest neoclouds — the AI-specialised cloud companies building data centres that exist for one purpose, training and running AI models — took on a $3.5 billion bridge loan with a twelve-month fuse.
The rate matters. Term SOFR plus 2.75% to start, floating. In a world where long-term yields have been grinding higher, floating-rate money gets more expensive the longer you hold it. And the tenor matters even more: 364 days. A year, minus a day. The market shorthand for a loan that is designed to be rolled or refinanced — not repaid out of cash flow.
Then there's the security. The facility is senior secured, meaning Citi gets first claim on specified collateral if things go wrong. And the price of the money can climb: the spread can step up to 3.50% over SOFR under certain conditions. None of this is unusual for a bridge. It is, however, a long way from the "build it and the hyperscalers will come" story of two years ago.
And the balance sheet keeps stacking up. This new facility lands on top of roughly $10 billion in convertible bond debt already outstanding — a pile that doubled after a $5.75 billion issue back in August. Nebius, in short, is financing the AI buildout the way most of the sector is: with other people's money, sequenced carefully, in ever-larger helpings. The company itself calls the approach "sequencing" its financing — short bridge now, bigger asset-backed facilities later.
The wreckage this lands in
Timing is everything in markets, and Nebius could hardly have picked a more telling moment. The announcement landed barely a week after the AI-infrastructure trade blew up. CoreWeave's bonds fell sharply, the shares followed, and the whole neocloud cohort got dragged down the stairs — the selloff Reuters name-checks in its own report.
We checked the tape on Thursday: NBIS was trading lower in premarket, down roughly 3%, and sits about 30% below where it was a month ago. CoreWeave hasn't fared better — it lost roughly a quarter of its market value last week, and yields on some of its bonds have climbed toward 15%, up from under 10% when the debt was issued. We covered CoreWeave's default insurance blowing past 1,000 basis points just last week, and the picture hasn't improved since.
Then came Gartner with a wrecking ball. The research firm's October forecast — widely cited, widely shuddered-at — projects that over 80% of neocloud providers will cease independent operations by 2030. The arithmetic behind it is stark: AI infrastructure owners would need to generate a cumulative $8.5 trillion in revenue through 2030 to cover announced capital spending, financing costs and a 12% return on invested capital. Gartner's actual forecast for AI data-centre revenue over the same stretch? No more than about $3.6 trillion.
"We [take the] position that 80% of neoclouds will cease independent operations by 2030," Will Sommer, Gartner's senior director analyst, told TechTarget's Beth Pariseau. Sommer added the careful caveat that "ceasing independent operations" can mean acquisition or partnership rather than outright failure — cold comfort, perhaps, for anyone who just signed a 364-day note. (If the term "neocloud" needs unpacking, here's our explainer on what these AI-specialised clouds actually are.)
October 23: the market's verdict on the facility
Update, Oct. 24: the market's verdict on the Citi line arrived fast. Nebius shares fell 7.23% to $159.17 on Oct. 22 — announcement day — leaving NBIS down 32.52% from its Sept. 30 close. CoreWeave and IREN fell with it, 10.06% and 8.37% respectively, both at 2026 lows. Reuters reported short sellers in US neocloud and data-centre names have booked a combined ~$6 billion in paper gains this month. The facility's fine print also got clearer: signed Oct. 17, disclosed Oct. 22, maturing Oct. 16, 2027, with the margin stepping up 0.25pp every 90 days to a 3.50% cap, secured against substantially all borrower assets and carrying a minimum-liquidity covenant. Against that, two offsets: Nebius took advance payments on ~70% of its contracts in Q2, and CEO Arkady Volozh said in September that today's GPU prices pay back their capex in about 22 months — with dynamic spot pricing published Oct. 21 as the market-clearing mechanism. The open question is whether lenders still show up when the 364 days run out.
Wall Street is split down the middle
The analysts, to their credit, are arguing in public. Piper Sandler's James Fish cut his Nebius price target to $185 from $237 on Wednesday, keeping a "Neutral" rating and citing lower valuation multiples across the sector plus concerns about AI demand, returns on capital and financing. StockTwits' markets desk put it more colourfully: neocloud stocks could stay "in the penalty box" until the financing outlook clears.
Bernstein, meanwhile, went on CNBC to remind everyone how lonely the bears have been — "We caught a lot of hate when we initiated CRWV with a $56 price target seven months ago," one of its analysts said, noting it's a lot harder to find bulls now. (Bernstein reiterated its "Underweight" on CoreWeave.)
On the other side: Truist reaffirmed a Buy on Nebius with a $355 target, pointing to those contractually secured orders and customer prepayments, while Goldman Sachs upgraded CoreWeave from Neutral to Buy earlier in the week. Two firms, two directions — and the share price, whichever day you check, is voting with the sceptics.
The $40 billion question
Let's sit with the paradox, because it's the whole story. Nebius has more than $40 billion in long-term contracts with investment-grade customers. Microsoft. Meta. The bluest of blue chips. And it still needed a one-year bridge from Citi.
Why? Because contracts are not cash. Those $40 billion are future revenue, recognised over years, while the GPUs and the buildings have to be paid for now — and Nvidia's chips, as we've written before, are getting more expensive, not less: Nebius itself hiked GPU rental prices by up to 21% in September. Prepayments and operating cash flow help, but not at the pace of a company trying to double capacity every year.
So the contract book becomes collateral — something to borrow against — rather than the thing that ends the borrowing. That's the tell. When your best asset is a promise of future revenue and your biggest cost is due today, every bridge loan is a bet that the music keeps playing for one more refinancing cycle.
None of this means Nebius is in trouble. The "sequenced" strategy — short bridge now, bigger asset-backed facilities later — is the correct playbook for a capacity crunch. But it is a playbook that works only as long as lenders keep showing up at the table, and last week's CoreWeave bond selloff was the market asking, out loud, what happens when they don't.
Our take
Strip the corporate poetry and this is what the neocloud era has always been: not a chips race, a money race. The bottleneck was never the GPUs — Nvidia will sell you as many as your balance sheet can swallow. The bottleneck is the balance sheet. Nebius just swallowed $3.5 billion more of it, on floating rates, for twelve months, secured against the furniture, while sitting on $10 billion of converts and a share price that has been colossally repriced in a month.
Is that shoddy engineering or smart sequencing? Honestly, it's both. Bridge financing is the correct tool for a capacity crunch — until the market decides it's the only tool left. The CoreWeave bond collapse was the warning; the analyst target cuts were the verdict; the Gartner 80% forecast is the obituary pre-written. Every one of these financing announcements now doubles as a referendum on whether the AI buildout is a growth story with a funding plan, or a funding plan with a growth story.
For now, the money won. Citi's $3.5 billion keeps the cranes moving and the GPU orders flowing into 2027. But 364 days is not a long time in the life of a data centre — and the next time Nebius comes back to the table, the lenders will remember exactly what happened to CoreWeave's bonds. The debt machine keeps spinning. Whether it's building an industry or winding a spring is the $3.5 billion question nobody at Citi can answer.
Sources: Reuters (Toby Sterling, Amsterdam, Oct 22, 2026); Channel NewsAsia (Reuters relay); Economic Times (ANI wire); TechTarget (Beth Pariseau on Gartner's forecast, Oct 14); StockTwits markets desk; ad-hoc-news.de; market data checked by us via Finnhub.
By Daniel Rao
Daniel Rao covers AI infrastructure and the business of compute for TechPulse USA — the debt, the data centres, and the deals holding the AI boom together.
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